Hinduatan Times

Govt’s tax revenue in FY22 jumps 34% to ₹27 L cr, surpassing target by ₹5 L cr

According to provisional data released on Thursday , the revenue collection is led by 49% growth in direct taxes and 20% growth in indirect taxes.

The Union government’s total tax revenue jumped 34% to ₹27.07 lakh crore in 2021-22, which is about ₹5 lakh crore more than the Budget estimate.

The government’s total tax revenue jumped 34% to ₹27.07 lakh crore in 2021-22, around ₹5 lakh crore more than the Budget estimate, indicating the rapid recovery of the economy last year, and also efficient tax administration. The number was also higher than the revised estimate of ₹25.16 lakh crore mentioned by the finance minister in February.

According to provisional data released on Thursday , the revenue collection is led by 49% growth in direct taxes and 20% growth in indirect taxes. Total direct tax collection in the financial year ended March 31 was ₹14.10 lakh crore and indirect tax, ₹12.90 lakh crore.

“The decrease in tax collection in the two years 2019-20 and 2020-21 is due to the disruption in economic activity in the wake of Covid-19, but the rise in tax collection in financial year 2021-22 is evidence of a sharp rebound and an economy that is back on track,” the Union finance ministry said in a statement.

Besides economic recovery, the ministry also gave credit to measures related to ease of compliance and the use of data analytics and artificial intelligence to check evasions. “Several initiatives taken by the government under its mission to push for a Digital India have laid the foundation for modern, convenient and transparent taxation system.”

The surge in tax revenues has lifted India’s tax to GDP ratio for the year 2021-22 to 11.7%, which includes a direct tax to GDP ratio at 6.1% and indirect tax to GDP ratio at 5.6%, the ministry added.

The year saw a significant growth in corporate tax. “Gross corporate taxes during 2021-22 were ₹8.6 lakh crore against ₹6.5 lakh crore last year, which shows that the new simplified tax regime with low rates and no exemptions has lived up to its promise, enhancing Ease of Doing Business for the corporate sector, stimulating India’s economy and increasing tax revenues for the Government,” the ministry said in the statement.

The number of corporate tax returns filed by businesses increased by 43,000 to over 986,000 . “This jump in corporate tax returns is the highest in recent years. The remarkable aspect of this particular jump in returns is that it has come with respect to a year marked by a pandemic-induced contraction in the economy, further underscoring the role played by compliance enforcement,” the finance ministry added.

The Union government’s focus on making India a global economic powerhouse and the host of measures adopted towards this commitment has directly reflected in India’s GDP growth in recent years, it said. “This has translated into increased revenue collection for the exchequer while keeping India well on the track towards achieving a $5 trillion economy in line with Prime Minister Narendra Modi’s vision,” it added.

The ministry said faster processing of tax returns boosted trust of taxpayers and helped in robust collections. “During the year, Income tax department gave refunds of ₹2.24 lakh crore. A total of 24 million refunds were issued.” The average processing time for returns during 2021-22 was 26 days; 71.4 million returns were filed in the year as compared to 69.7 million the previous year.

“This has been made possible due to the faster processing of returns through the new e-filing portal which was launched in June 2021. This taxpayer friendly portal is integrated with immediate processing of Income Tax Returns (ITRs) to issue quick refunds to taxpayers, thereby offering them a convenient, seamless experience and ensuring better compliance,” it said.

Another feature that has improved voluntary compliance is the faceless hand-holding of the taxpayers, provided by the new Annual Information Statement (AIS), to e-file their income tax returns quickly and correctly, the ministry said.

Similarly several reforms helped robust GST collections in 2021-22. “GST has seen an exemplary growth during 2021-22 despite two waves of Covid-19 pandemic,” the ministry of finance said in its statement. The Central GST (CGST) revenues increased from ₹4.6 lakh crore last year to ₹5.9 lakh crore in 2021-22. The average monthly gross GST revenue (including shares of states) in 2021-22 was ₹1.23 lakh crore as compared to ₹94,734 in 2020-21 and ₹1.01 lakh crore in 2019-20, it said. March witnessed an all-time high GST collection at ₹1,42,095 crore.

The finance ministry is confident about maintaining the trend in 2022-23. “With a big push to capex in the Union Budget of 2022-23, the coming years are going to see a surge in domestic manufacturing as well as growth in employment. These in turn will directly boost tax contribution to the exchequer.”

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